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DOT.COM: WIRED WISDOM Great Expectations Until the broader population embraces the new internet technologies, the companies that build them will not realise their full value. By Rohit Bhagat, James Abraham & Ralph Heuwing
It has been a tumultuous year. From the near dismissive approach it received last year to the euphoric heights of February to the doldrums of today, dotcoms have come (and gone) a long way. While yesterday's expectations may have been too great, today's pessimism is too deep. We are moving from a period of experimentation to a period of formation. Perhaps the opportunities for overnight wealth are vastly diminished. But there is still room for great expectations.
In this transition, many ventures will fail. But the ones who survive will have a lasting impact on the way we buy and sell, find friendships, and keep in touch. These survivors would have tapped into the real power of the internet, the real revolutionary power to bring people together. People who are otherwise separated, by geography, hierarchy, process, or whatever. In these connections lie opportunities for profit. These survivors will have developed new technology services. In the course of experimentation, many companies have developed new technologies, such as collaborative filtering, transaction engines, security protocols, and others. They are discovering that these technologies are sources of revenue not earlier anticipated. These survivors will also be part of a global market, and not a merely regional or national one. That means opportunities to expand into new markets and explore new partnerships, mergers and acquisitions. That also means threats from players and trends thousands of miles away. This may be the opportune moment to step out and find global partners to strengthen a company's long-term prospects. These survivors will have learnt a sobering lesson-that overnight wealth is unlikely to happen again. First, because change will take time. Second, because the value from the internet will most likely go to those who use it, not just to those who build it. In many cases, internet usage still remains with the technologically curious. Until the broader population embraces these technologies, the companies that build them will not realise their full value. And even when they do, the value from the technologies will mostly go to the users, not the producers-consumers will find what they are looking for, business partners will have lower costs of doing business with each other, and prices will drop. Over the coming years, as we move out of experimentation, the internet and e-commerce will become just another part of all our lives. In the next three to five years, we expect e-commerce to disappear as a separate topic area from our classification scheme and even from this magazine. Until then, there is much on the road ahead. Stay tuned. Rohit Bhagat is the Head of The Boston Consulting Group's e-Commerce Practice, James Abraham is Director, The Boston Consulting Group's India operations, and Ralph Heuwing is the Managing Director of The Boston Consulting Group's India operations. |
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